Attorney Tristan Pettit, you know, the guy that writes the standard legal forms for Wisconsin Legal Blank, is doing his landlord-tenant Boot Camp again on Saturday, October 7th. There are still a few seats left.

You get a full day of landlord-tenant law training for the price you’ll spend for 30 minutes of attorney time after you make a mistake in this complex area of law,

All the details are at:
http://www.landlordbootcamp2017.com

But the proof of value is I send my staff to Tristan’s Boot Camps. Even though I know the laws, it is of great value to have staff learn what they need to be concerned about in a different setting than the office.

Seattle tries to make this a landlord issue, ‘How dare landlords prohibit criminals from renting. These good people paid the price for their crime and should be free to live anywhere they want after being released from prison!‘ And Seattle’s landlords fell into this political trap, opposing the ordinance from a concerned landlords’ perspective, rather than what it really is – an assault on the rights of the vast majority of Seattleans that are not criminals.

Let’s step back and look at this situation truthfully.

Landlords screen for criminal backgrounds not for their benefit, but rather do so mostly out of concern for the safety and tranquility of their other tenants and neighbors. The selfish motivation of the owners, if you want to call it that, is crime devalues neighborhoods. But that motivation is beneficial to all in the neighborhood as well as the city itself.

Reduce owners civil liability for the bad acts of their tenants. Jimmie ‘the Hacksaw’ Smythe from 201 rapes and murders Ms. Jones in Apt 310. ‘Don’t blame me. I could not screen for his previous twenty years of criminal activities. In fact feel sorry for me, I now have two vacancies.”

Likewise, owners will no longer be accountable to the municipality for disruptive tenants. ‘Hey, I just rented to the people you told me I had to take.’

The motivation behind screening out criminals was to make neighborhoods more stable and more desirable, thereby benefiting the municipality, the residents, and ultimately the property owners.

This screening prohibition is just another case of failed liberal governments harming the very people they purport to help and support.

Sadly, when this ordinance fails, and it will fail, rental owners will face criticism for the increase in crime happening to Seattle’s more affordable neighborhoods. This time the landlords will be blamed for allowing the very criminals into their units that they were required to under this new ordinance.

For the past couple of years, we have sold out both the spring and fall sessions of Attorney Tristan Pettit’s AASEW Landlord Tenant Law Boot Camp.

It looks like we are on track to do the same for the upcoming February 18th, 2017 Boot Camp.

Last fall I waited too long to sign up my new staff members and could not get them in. I signed up three staff people very early for this one. 😉

You may ask ‘Why would Tim pay $537 plus wages to send three people to Boot Camp when he knows the laws so well?’

The answer is easy: One small mistake or missed opportunity will cost us far more than this. It is important that my folks know the law as WI landlord Tenant Law is not always what a reasonable person would assume it to be. And this is ever evolving, with both new laws, new interpretations by courts and new tricks by tenant advocates*. This is not the first time we’ve sent staff either.

This course is presented by Attorney Tristan Pettit. Tristan’s law practice focuses on landlord-tenant law, he is a current board member of the Apartment Association as well as former president, and drumroll please, he writes all the standard landlord tenant forms for Wisconsin Legal Blank.

If you want to go, now that my seats are secure ;-), you can sign up online or call Joy at the Association 414-276-7378 and reserve a spot.

http://www.landlordbootcamp2017.com

* Most “tenant advocates” only advocate for tenants that break the rules. This ultimately costs the rest of the good tenants more in increased rents and decreased service or more noise and disruption… but this is another story for another day.

Can we charge a “general ” application fee to the prospective tenant to cover our office costs to process an application and keep the fee? Other people are doing it. How?

No, the law is clear on this. If you do not accept the tenant, then all the money collected except for the actual amount you paid for a national bureau credit report, must be refunded.

If people are charging a non-refundable application fee in excess of what they paid for a credit report or more than $20, they are in violation of ATCP 134.05 (2) Some owners try to be clever by calling the earnest money by some other name. That fails.(See the legal definition of Earnest Money below)

However, if the prospective tenant fails to pay the balance and move in, you may retain the earnest money to cover and costs and lost rents you incurred due to their failure to take possession. In fact the prospective tenant could owe a lot more than the earnest deposit. See ATCP 134.05(3)(b) below.

Earnest Money is legally defined as:

ATCP 134.02 (3) ”Earnest money deposit” means the total of any payments or deposits, however denominated or described, given by a prospective tenant to a landlord in return for the option of entering into a rental agreement in the future, or for having a rental agreement considered by a landlord. “Earnest money deposit” does not include a fee which a landlord charges for a credit check in compliance with s. ATCP 134.05 (3).

The requirements to refund the earnest deposit if the tenant withdraws the app or the landlord rejects the app either explicitly or by nonaction:

(a) A landlord who receives an earnest money deposit from a rental applicant shall send the full deposit to the applicant by first-class mail, or shall deliver the full deposit to the applicant, by the end of the next business day after any of the following occurs:

1. The landlord rejects the rental application or refuses to enter into a rental agreement with the applicant.

2. The applicant withdraws the rental application before the landlord accepts that application.

3. The landlord fails to approve the rental application by the end of the third business day after the landlord accepts the applicant’s earnest money deposit, or by a later date to which the tenant agrees in writing. The later date may not be more than 21 calendar days after the landlord accepts the earnest money deposit.

Law permitting witholding of Earnet Money for failure to take possession:

ATCP 134.05 (3) Withholding an earnest money deposit.

(a) A landlord may withhold from a properly accepted earnest money deposit if the prospective tenant fails to enter into a rental agreement after being approved for tenancy, unless the landlord has significantly altered the rental terms previously disclosed to the tenant.

(b) A landlord may withhold from an earnest money deposit, under par. (a), an amount sufficient to compensate the landlord for actual costs and damages incurred because of the prospective tenant’s failure to enter into a rental agreement. The landlord may not withhold for lost rents unless the landlord has made a reasonable effort to mitigate those losses, as provided under s. 704.29, Stats.

[C]an I charge a flat application fee ( $20-25) to prospective tenants that includes the cost of the checking them out, labor etc. in our office, this may not include a credit check. Do I have to give it back if I don’t accept them?

No, you can only charge the actual amount you paid for a national credit bureau report. Any amount collected above the cost of the credit report must be refunded if the tenant is rejected or applied to the amounts they owe if they are accepted.

For us the cost of the report in minimal (less than ten bucks) and the requirement of the law to provide a copy of the report to the applicant violates our terms of use with the bureau we use, so we do not charge a fee.

We do require a $50 deposit to hold the unit while it is being processed. If the tenant is accepted the money is applied to their move in money. If the tenant is rejected, the $50 money order is returned to them. If they are accepted, but then fail to take the unit and we lose rent because of this, the earnest money is used to offset part of the lost rent they owe under ATCP 134.05 (3).

(a) Except as provided under par. (b), a landlord may require a prospective tenant to pay the landlord’s actual cost, up to $20, to obtain a consumer credit report on the prospective tenant from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis. The landlord shall notify the prospective tenant of the charge before requesting the consumer credit report, and shall provide the prospective tenant with a copy of the report.

(b) A landlord may not require a prospective tenant to pay for a consumer credit report under par. (a) if, before the landlord requests a consumer credit report, the prospective tenant provides the landlord with a consumer credit report, from a consumer credit reporting agency that compiles and maintains files on consumers on a nationwide basis that is less than 30 days old.

Note: Paragraph (b) does not prohibit a landlord from obtaining a more current consumer credit check at the landlord’s expense.

(a) A landlord may withhold from a properly accepted earnest money deposit if the prospective tenant fails to enter into a rental agreement after being approved for tenancy, unless the landlord has significantly altered the rental terms previously disclosed to the tenant.

(b) A landlord may withhold from an earnest money deposit, under par. (a), an amount sufficient to compensate the landlord for actual costs and damages incurred because of the prospective tenant’s failure to enter into a rental agreement. The landlord may not withhold for lost rents unless the landlord has made a reasonable effort to mitigate those losses, as provided under s. 704.29, Stats.

Note: See Pierce v. Norwick, 202 Wis. 2d 588 (1996), regarding the award of damage claims for failure to comply with provisions of this chapter related to security deposits. The same method of computing a tenant’s damages may apply to violations related to earnest money deposits.

Disclaimer

I am "just a landlord," NOT an attorney or accountant. If you need legal advice, tax advice or have appendicitis, don’t rely on something you read on the internet and do it yourself. Rather, hire a competent professional.